Building the companies of tomorrow
The small companies of today could be the large companies of tomorrow. It could also be companies that are thinking in new ways about marketing and funding and are creating a working environment that attracts new talents.
TEXT: Jan Hökerberg
18 DECEMBER, 2018
When the global employer branding company Universum, which is headquartered in Sweden, presented its 2018 survey The Most Attractive Employers in China, it was no surprise to find that the technology giants Alibaba, Huawei and Tencent were at the top of most rankings (see separate ranking lists).
Universum carried out the survey over almost 56,000 students at 110 universities in China and presented the results in six different rankings.
“When we started the China rankings in 2006, most of the highest ranked companies were international and there were also some state-owned companies on the list. Over the past five years we have seen a shift to local private companies,” says William Wu, vice president for Asia-Pacific at Universum in Shanghai.
Many of today’s big companies in China, such as Tencent, Alibaba, Baidu, JD.com and Xiaomi, were startups 20 years ago or less.
When the students were asked which career goal is the most important, “to have work/life balance” came out on top. Some five or 10 years ago, “to become a leader or a manager” was regarded as more important, but it’s obviously not the case anymore among the new generation.
“We conduct annual student surveys in 50 countries and over the past three or four years work/life balance has been the top choice in 90 per cent of the markets,” says Wu.
“In China, we also made follow-up questions about what they associate with work/life balance. The students responded that work location was very important – they don’t want to spend long hours commuting to and from work. They also want to have a career that is aligned with their personal interests. They want flexible working hours and even to be allowed to do personal things during work hours such as using social media,” Wu says.
Today’s generation of students also expects the employer to value and respect the employees and to recognise their contribution to the company.
“If a company has a good culture and takes good care of its people, today’s generation of students feel that they will easier achieve a good work/life balance. These are values that employers have to consider today if they are going to be successful tomorrow. They need to provide an environment that young people will feel comfortable with,” says Wu.
There are many things employers need to be better at and many new things they need to keep up with.”
William Wu, Universum
Another conclusion from Universum’s survey is evidence that international opportunities are not as attractive anymore among young Chinese compared to some eight to 10 years ago.
“At that time, students thought that international brands offered the best jobs, the most attractive working environments and a better compensation packages. Today, it has become easier for young people to acquire international experience before entering their careers. It is more common today for students to go abroad to get further education,” says Wu.
“At the same time, local companies have become more attractive, more innovative and more competitive both on the market and in their employment offerings,” he notes.
Even as China’s economic growth slows down, economic development is continuing at a fast clip.
“Employers of all kinds – multinational top brands, emerging local companies and startups – need fresh blood. Competition will become even fiercer over the coming three to five years. Companies need to have a clear strategy of how to present themselves as an attractive employer, what they have to offer compared with their competitors, how they can embrace new technologies and more effectively propagate their messages to targeted audiences,” says Wu.
“There are many things employers need to be better at and many new things they need to keep up with,” he adds.
To become a successful brand tomorrow, companies also have to think in different ways when it comes to marketing and communications. E-commerce and social media have already changed the landscape all over the world and particularly in China. Traditional marketing through large-scale advertisement campaigns and TV commercials may no longer be winning formulas in tomorrow’s business world.
Charlotta Gandolfo is an example of a newly started brand that in less than a year has made an impact in China by launching stylish ladies’ resort wear without spending any money on marketing campaigns.
The brand owner, Charlotta Lagerdahl Gandolfo, had made a successful career in the PR industry both in Sweden and China but decided in 2017 to try something totally new.
In less than a year she managed to sell two collections by using her network of friends and their friends and by approaching the right kind of stores. A friend made her website, another created the logotype. In her network are many influencers such as fashion editors, actors and singers who wear her clothes in public.
“The right type of women have worn my clothes and posted it on their social media channels. Marketing through relationships has replaced big marketing campaigns. Building a brand in this way could definitely not have been done 10-15 years ago,” she says.
Working with influencers and key opinion leaders is the trademark of Viral Access, a Swedish-owned company headquartered in Shenzhen.
In three years time, founder Folke Engholm has built Asia’s leading influencer marketing firm which today employs 120 people and has more than 110,000 influencers in its network.
We are in a phase where we have gone from being an innovation-driven startup to having become more mature and ready to scale up our operations.”
Jens Helmersson, QuizRR
When a company wants to grow, one of the obstacles is often lack of funding. Therefore, finding the right type of partners could often be the key to success.
QuizRR is a Swedish educational technology (edtech) company that offers innovative training solutions that help brand owners and suppliers to train their employees to become more aware of rights and responsibilities in the workplace.
QuizRR (the two “R”s stand for rights and responsibilities) was founded in 2013. The company has 20 employees in Sweden, China, Bangladesh and Hong Kong, that are working with 50 global brands and over 270 factories in China, Bangladesh and Mauritius. Over the years, it has performed over 300,000 training sessions for more than 90,000 people.
“From the start, our strategy as a company has been to grow our business together with partners that share the same passion for creating a better world. We look for investors that believe in our solution as a way to create responsibility,” says Jens Helmersson, co-founder and managing director at QuizRR.
Before the company’s digital educational tool was developed, QuizRR was backed by companies, such as Clas Ohlson, and by the Antonia Ax:son Johnson Foundation for Sustainable Development (Axfoundation), that bought licenses in advance so that QuizRR could finance building the product.
A business incubator also supported QuizRR with legal advice, coaching and an office. A digital design firm, Ocean Observations, provided low-cost support to develop the tool.
In 2016, three financiers joined to help the company with funding.
“Without all this initial support, we’d never have been able to continue to grow and make our business scalable,” says Helmersson.
In April 2018, QuizRR raised US$1.3 million in a financing round led by Norrsken Founders Fund – a seed fund that invests in companies with the potential to radically improve the world – and Working Capital – an early-stage venture fund that invests in scalable innovations to meet growing corporate demand for more transparent and ethical supply chains.
Working Capital is owned by Humanity United, which is part of The Omidyar Group, led by the eBay founder Pierre Omidyar.
“It is important to bring in new partners that can look upon our company in a new light and strengthen it not only financially but also from a global growth perspective,” says Helmersson.
“It’s a challenge to be located in Sweden and to create a global business with little or no money. For us, to be able to establish the company in China, Bangladesh, Mauritius and soon Thailand, we need support and resources, otherwise it’s almost impossible,” he adds.
Traditional companies must be aware of that, if they are not adjusting to new developments, numerous new companies will surpass them.”
Nordic Innovation House
Helmersson says that QuizRR can’t be described as a startup any more. It is growing quickly and the future looks bright.
“We are in a phase where we have gone from being an innovation-driven startup to having become more mature and ready to scale up our operations,” he says.
He believes that the company, in the next five years, will grow to become a big company that has established itself in at least 10 different markets.
“It took us three years to reach 10,000 training sessions and two more years to go above 300,000 sessions. The more brands that join, the faster we can scale up the business,” says Helmersson.
Many of today’s large corporations in China were startups some 20 years ago or less. Tencent and JD.com were both founded in 1998, Alibaba in 1999, Baidu in 2000 and Xiaomi as late as in 2010.
In other words, many of today’s startups could be the giants of tomorrow.
The Nordic startup community got a boost on 28 November when Nordic Innovation House (NIH) was inaugurated in Hong Kong.
As a soft-landing concept for Nordic incubators, NIH was first established in 2011 in Silicon Valley and in New York City in 2017. In early 2018, it also opened in Singapore. In Hong Kong, it is supported by the governments of four Nordic countries – Sweden, Norway, Finland and Iceland – together with Business Sweden, Innovation Norway and Business Finland.
“When Nordic companies in general think about expansion, they are automatically thinking in terms of going West. Our mission is to educate them by showing the opportunities and potential that exist in this region so that they dare to go East,” says Christian Bergenstråhle, an experienced communicator who recently was appointed community director at NIH in Hong Kong.
NIH can give support to Nordic entrepreneurs in small- and medium-sized companies that are new to the Hong Kong and China markets or who see the benefits of a being part of a Nordic community. Besides the physical presence, member companies will be offered to participate in a number of activities and also get access to other networks within their ecosystems.
“We expect technology companies to become dominant among our future members. However, innovation is much broader than technology. Nordic countries have a spectre of innovative companies in, for example, design and social innovation,” says Bergenstråhle.
One reason for locating NIH in Hong Kong is the Chinese government’s Greater Bay Area scheme to link the cities of Hong Kong, Macau, Shenzhen, Guangzhou and several other cities in Guangdong province into an integrated economic and business hub.
“Shenzhen might have a higher relevance because of its strong innovative climate but Hong Kong has a lower threshold when it comes to establishing businesses,” says Bergenstråhle.
Tech startups are popping up all over the world in many industries and many of them could become successful big enterprises in the future.
“So much is happening and it’s happening so fast,” Bergenstråhle notes. “Traditional companies must be aware of that, if they are not adjusting to new developments, numerous new companies will surpass them.”
There are many explanations as to why Chinese entrepreneurs have been able to grow their companies so fast. One is that they have learnt to embrace rapidly changing business environments. Another is the Chinese mindset, which is focused on coming up with quick solutions and when it comes to rolling out products and services.
“Nordic companies might not yet have that mentality, but I think that a key to success for them is to bring parts of the entrepreneurial culture they have at home and integrate them into the thinking that exists here in Asia,” says Bergenstråhle.
The most attractive employers in China 2018 – Business and commerce
3 Bank of China
4 PricewaterhouseCoopers (PwC)
6 Ernst & Young (EY)
9 McKinsey & Company
100 Volvo Group
The most attractive employers in China 2018 – Engineering
9 State Grid
37 Volvo Cars
76 Volvo Group